USA: 2026 conforming loan limits, jumbo loans and cancelling PMI

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Kooky

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Two numbers shape a conventional mortgage in the United States long before the borrower sees a rate. The first is the size of the loan measured against a ceiling that changes every January and differs from one county to the next. The second is the size of the loan measured against the value of the home, which decides whether the borrower pays for insurance that protects somebody else, and for how long.

The first number is the conforming loan limit, set by the Federal Housing Finance Agency (FHFA). A loan above it is what the agency calls a jumbo loan. The second is the loan-to-value ratio, and the insurance attached to it is private mortgage insurance, or PMI, whose removal follows federal standards that the Consumer Financial Protection Bureau (CFPB) describes for borrowers.

This guide sets out both from the pages of the bodies that publish them: the FHFA's release of 25 November 2025, its methodology addendum and its questions and answers for the 2026 limits; the CFPB's two pages on PMI; and Fannie Mae's Servicing Guide for the rules a servicer follows when the insurance comes off. It deals with conventional loans; FHA and VA loans appear only where the conforming limit touches them.

FHFA news release, 25 November 2025; CFPB page on removing PMI, reviewed 28 August 2026. The 78% is measured against the home's original value.

What the conforming loan limit is

The FHFA's questions and answers define the conforming loan limit in one line: it is the highest mortgage amount that Fannie Mae or Freddie Mac can acquire. The two companies, which the agency calls the Enterprises, do not lend to home buyers. They acquire mortgages that lenders have made, and the limit is the largest loan they are allowed to take on. The FHFA, according to its release, regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks.

Three features of the limit matter in practice.

It is annual. The FHFA announced the 2026 values on 25 November 2025, and its release says they apply to mortgages the Enterprises acquire in 2026. The agency's questions and answers add that the limits are updated at the end of each November and take effect on 1 January.

It follows the acquisition, not the application. The same document says the limit that counts is the one in force in the year the Enterprise acquires the loan.

It is local. A baseline value applies to most of the country: more than 95 per cent of counties, by the FHFA's count. In the remaining areas, where homes cost more, the limit is higher, up to a national ceiling.

How the 2026 baseline was calculated

The Housing and Economic Recovery Act of 2008, known as HERA, leaves the FHFA little discretion. The release says the act requires the baseline to be adjusted each year to reflect the change in the average home price in the United States. The agency measures that change with its own House Price Index, in the version it describes as nominal, seasonally adjusted and expanded-data, which its questions and answers say was adopted for this purpose in 2015.

For 2026 the release puts the rise at 3.26 per cent between the third quarters of 2024 and 2025. The addendum gives the working. The index stood at 405.89713556 in the third quarter of 2024 and at 419.11864149 a year later, a difference of 13.22150593 points, which is 3.25735384 per cent of the earlier value.

The baseline rose by the same percentage. The release states the result: US$832,750 for a one-unit property, an increase of US$26,250 from 2025. By subtraction, the 2025 baseline was US$806,500. The release does not print that figure, but the arithmetic leaves no other. Applying the full percentage to US$806,500 gives a little over US$832,770, and the addendum explains the gap: baseline values are rounded down to the nearest US$50.

One rule protects borrowers and lenders from a moving target in a falling market. According to the FHFA's questions and answers, the conforming loan limit does not decrease. After a downturn it stays flat until house prices have recovered to their earlier peak. The document gives the example of the baseline that stayed at US$417,000 from 2006 until 2017. The same approach holds county by county: a county's limit does not fall even if its median home value does. For 2026 the addendum says each limit is the higher of the new HERA calculation and the HERA limits of 2009 to 2025.

That rule explains a detail of the release that can look odd. The limits are higher in 2026 than in 2025 in all but 32 counties or county equivalents. In those 32 the limit did not rise.

Limits for two- to four-unit properties

The conforming limit covers properties of one to four units, and each size has its own baseline. A buyer of a duplex, a triplex or a fourplex is therefore measured against a higher figure than the buyer of a single-family house. The FHFA release gives only the one-unit value. The others are in the addendum.

The table gives baselines only. In high-cost areas the multi-unit limits are higher, and the addendum describes how they are derived: 115 per cent of the local one-unit median is multiplied by a fixed ratio for each property size (1.28021583 for two units, 1.54748201 for three, 1.92314149 for four) and the result is checked against the ceiling. The documents read for this guide do not print the multi-unit ceilings in dollars, so they are not given here. The county list the FHFA publishes with its release, as a spreadsheet and a map, carries the figure for each county and each property size.

High-cost areas and the 150 per cent ceiling

The baseline is a floor as well as a standard. Where homes are expensive, the limit rises above it, by a rule the release sets out in two parts. An area is a high-cost area when 115 per cent of the local median home value exceeds the baseline. Its limit is then a multiple of that median, but never more than 150 per cent of the baseline. For a one-unit property in 2026 that ceiling is US$1,249,125, which is 150 per cent of US$832,750.

The addendum adds the mechanics. The FHFA uses median home value estimates produced by the FHA and the Department of Housing and Urban Development. Inside a metropolitan or micropolitan area it takes the highest county median and applies the result to every county in the area, so that neighbours in one housing market share one limit. High-cost values are rounded down to the nearest US$25.

The agency's questions and answers work through four cases with third-quarter 2025 data, which show the rule better than a definition can.

Santa Barbara and Seattle receive exactly 115 per cent of their median. The Washington area computes above the ceiling, so its counties receive the ceiling. The FHFA notes that of more than 3,000 counties, roughly 100 to 200 qualify for a limit above the baseline in a given year.

Four places are treated apart. In Alaska, Hawaii, Guam and the US Virgin Islands, the FHFA says the limits are at least 50 per cent above the national baseline, which makes their one-unit baseline for 2026 US$1,249,125, the same figure as the mainland ceiling. Their own ceiling is where two federal documents differ. The FHFA release gives US$1,873,675. The Department of Housing and Urban Development's Mortgagee Letter 2025-23, dated 11 December 2025, gives US$1,873,625 for the same areas in its own table of FHA limits. The gap is US$50. One hundred and fifty per cent of US$1,249,125 is US$1,873,687.50, and rounding down to the nearest US$25 gives the FHFA's figure; the two agencies are also setting limits for different programmes. Neither document explains the difference, and it is recorded here without being resolved.

What makes a loan a jumbo loan

The FHFA's definition is short: loans above the conforming loan limit are known as jumbo loans. Nothing else is needed to make a loan jumbo. It is not a matter of the price of the home, the income of the borrower or the type of property. It is the loan amount compared with the limit that applies in that county, for that number of units, in that year.

Because the limit is local, the same loan can fall on either side of the line. A worked example shows how, using a one-unit home and illustrative figures.

Assume a purchase price of US$1,000,000 in a county where the baseline applies. With 20 per cent down, the buyer pays US$200,000 and borrows US$800,000. That is below US$832,750, so the loan is within the conforming limit. With 10 per cent down, the buyer pays US$100,000 and borrows US$900,000. That is US$67,250 above the baseline: a jumbo loan.

In a county that carries the high-cost ceiling of US$1,249,125, the same US$900,000 loan is within the conforming limit again.

The example also shows what the limit means for the cash a buyer needs. To keep the loan at or under the baseline on a US$1,000,000 purchase, the borrower must bring US$167,250, the price less US$832,750, which is 16.725 per cent of the price. Whether a buyer chooses a larger down payment or a jumbo loan depends on the terms on offer in each case.

How the limit reaches FHA and VA loans

The conforming limit is written for Fannie Mae and Freddie Mac, but other federal programmes are anchored to it, each in its own way. The FHFA's questions and answers summarise them.

The FHA uses the national conforming limit as a yardstick. Its limits follow local median prices, with a low-cost figure equal to 65 per cent of the conforming limit and a high-cost figure equal to 150 per cent of it. HUD's Mortgagee Letter 2025-23 gives the resulting one-unit amounts for 2026: a floor of US$541,287 and a ceiling of US$1,249,125.

VA-guaranteed loans are no longer tied to it. The FHFA says that since 1 January 2020, under the Blue Water Navy Vietnam Veterans Act of 2019, those loans are not limited to the conforming loan limit.

What private mortgage insurance is, and how it is paid

The second half of the subject starts where the down payment is small. According to the CFPB, private mortgage insurance is a type of mortgage insurance that a borrower may be required to pay for on a conventional loan when the down payment is less than 20 per cent of the purchase price. It can also be required on a refinance when the borrower's equity is less than 20 per cent of the home's value.

The name can mislead. The CFPB is direct on the point: PMI protects the lender, not the borrower. It is arranged by the lender and provided by private insurance companies. The borrower pays for cover against the lender's loss if the loan goes unpaid.

The bureau describes three ways the premium can be charged.

• A monthly premium, added to the mortgage payment. It appears on page 1 of the Loan Estimate and of the Closing Disclosure, in the Projected Payments section.
• A single up-front premium paid at closing. It appears on page 2 of both forms, in section B.
• Both: an up-front premium and a monthly one.

The up-front form carries a risk the CFPB spells out. A borrower who pays the premium at closing and then moves or refinances may not be entitled to a refund of it.

The three points at which PMI ends

For most borrowers PMI is temporary. The CFPB sets out the federal standards that govern its removal, and they apply to a defined group of loans: mortgages for single-family principal residences that closed on or after 29 July 1999. The bureau's consumer page does not name the statute behind them. A separate CFPB document does: Compliance Bulletin 2015-03 of 4 August 2015 describes the cancellation and termination of PMI as provisions of the Homeowners Protection Act of 1998. The text of the act itself was not read for this guide, so no section of it is cited.

Everything is measured against one reference, the home's original value. The CFPB says this generally means the contract sales price or the appraised value at the time of purchase, whichever is lower. For a loan that has been refinanced, it is the appraised value at the time of the refinance. A rise in the market does not change it.

The first point belongs to the borrower. The right to ask arises on the date the principal balance is scheduled to fall to 80 per cent of the original value, a date the CFPB says is printed on the PMI disclosure form given with the loan. A borrower who cannot find the form can ask the servicer for the date. The request can come earlier if extra payments have already brought the balance down to 80 per cent.

The second point belongs to the servicer. When the balance is scheduled to reach 78 per cent of the original value, PMI must be terminated automatically. The condition is that the borrower is current on payments. A borrower who is behind on that date is not shut out: according to the CFPB, termination follows shortly after the payments are brought up to date.

The third is a backstop. Even if the balance has not reached 78 per cent, the servicer must end PMI the month after the loan reaches the midpoint of its amortisation schedule, which on a 30-year loan is after 15 years. The borrower must again be current. The CFPB explains who this helps: borrowers whose loans have an interest-only period, a principal forbearance or a balloon payment, where the balance falls more slowly than on an ordinary schedule.

Note the word "scheduled" in the second point. The automatic date comes from the original payment schedule, not from the balance the borrower has actually reached. Extra payments bring forward the right to ask at 80 per cent. The CFPB's page does not say they bring forward the automatic date.

Asking for cancellation: conditions and a worked example

A request at 80 per cent is not granted on the balance alone. The CFPB lists four conditions.

1. The request is made in writing.
2. The borrower has a good payment history and is current on the loan.
3. The borrower certifies that there are no junior liens on the home, such as a second mortgage.
4. The borrower provides evidence, an appraisal for instance, that the value of the home has not fallen below its original value.

The fourth condition is the one that can delay matters. If the home is now worth less than its original value, the CFPB says the borrower may not be able to cancel on the scheduled date. The 78 per cent termination and the midpoint termination do not carry that condition in the bureau's description: they depend on the schedule and on payments being current.

A worked example fixes the amounts. The figures are illustrative.

Assume a one-unit principal residence bought for US$500,000, with an appraisal at purchase of US$510,000. The original value is the lower of the two: US$500,000. The buyer puts down 10 per cent, US$50,000, and borrows US$450,000, a starting loan-to-value ratio of 90 per cent. PMI is required.

• The right to ask arises when the balance reaches US$400,000, which is 80 per cent of US$500,000. The borrower must have repaid US$50,000 of principal.
• Automatic termination comes on the date the schedule shows a balance of US$390,000, which is 78 per cent of US$500,000: a further US$10,000 of principal.
• If the loan runs for 30 years and neither point has been reached, PMI ends the month after the fifteenth year.

When each balance is reached depends on the interest rate and the term, which the example does not assume. Between the first two points lies US$10,000 of principal: a written request ends the premiums over that stretch, and without one they run until the automatic date.

Fannie Mae's rules: original value and current value

The CFPB notes that Fannie Mae and Freddie Mac may set their own cancellation guidelines, provided these are not less favourable to the borrower than the federal standards. Fannie Mae's are in its Servicing Guide, topic B-8.1-04, dated 15 May 2019, in the edition of the guide published on 12 August 2026. They are instructions to servicers, but they tell a borrower what to expect. Freddie Mac publishes its own guide, which is not described here.

The guide confirms the federal points and adds detail. For a one-unit principal residence or second home on a loan closed on or after 29 July 1999, termination is automatic at 78 per cent of original value on the scheduled date, or on the first day of the month after the midpoint if that comes first. No fee may be charged for an automatic termination. The test of being current is precise: the payment due in the month before the termination date must have been paid by the end of that month. If it was not, the servicer does not terminate, tells the borrower within 30 days, and terminates at a later review once payments are current.

For a request based on original value, the guide sets the threshold at 80 per cent for a one-unit principal residence or second home and at 70 per cent for the other properties. It also defines an acceptable payment record: current at the time of the request, no payment 30 or more days past due in the last 12 months, and none 60 or more days past due in the last 24 months. The servicer checks the present value of the home, first with an automated valuation. If that valuation is at or above the original value, the insurance is terminated. If it is below, or none is produced, the request is denied unless the borrower pays the balance down to the threshold or chooses another form of valuation.

Fannie Mae also allows something the CFPB's page does not describe: a request based on what the home is worth today. A borrower whose home has gained value can ask before the balance reaches 80 per cent of the original value, on these terms.

Several conditions surround the table. The servicer may not solicit this kind of request; it has to come from the borrower. The value must come from a valuation based on an interior and exterior inspection. The same 12-month and 24-month payment tests apply. And the two-year wait is lifted only for documented improvements that, in the guide's terms, substantially improve the home's marketability and extend its useful life, such as a renovated kitchen or bathroom or added floor area. Maintenance repairs do not count.

Return to the worked example, still with illustrative figures. Suppose that three years after the purchase the balance stands at US$430,000. To meet the 75 per cent ratio, the home must be valued at US$573,334 or more, since US$430,000 divided by 0.75 is US$573,333.33. Suppose instead that the loan is six years old and the balance is US$415,000. The ratio allowed is now 80 per cent, and the value needed is US$518,750.

What these sources leave open

Four limits of this guide follow from the limits of the documents behind it.

The 2026 figures have an end date. The FHFA updates the limits at the end of each November for the following 1 January, so the values for 2027 are scheduled to be announced after this guide's date.

A county's limit is in the FHFA's county list, not in the national numbers, least of all for two- to four-unit homes in high-cost areas.

Cost is outside these pages. Neither the price of PMI nor the rate, down payment or credit standard of a jumbo loan is published in the federal documents used here. The CFPB notes only that some lenders offer low-down-payment conventional loans without PMI, usually at a higher interest rate.

The cancellation standards are not universal. The CFPB says FHA and VA mortgages follow different requirements, as does lender-paid insurance. The document that governs a particular loan is its own PMI disclosure.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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